X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WOODLAND HILLS, CA-Younan Properties is forming a new commercial debt group that will invest up to $200 million in underperforming loans and distressed office properties. The privately held Woodland Hills-based firm will look for deals ranging from $5 million to $50 million throughout the country, targeting mispriced mezzanine loans, B notes, whole loans and nonperforming first mortgages.

According to Zaya S. Younan, chairman and CEO of Younan Properties, the current instability in the debt markets and “the inability of lenders to hold an underperforming loan while the property is stabilized” provide excellent opportunities to acquire debt at discounted prices for key assets in major markets. Younan says that his new debt group will look for situations where it can actively assist in the management of the property with a view toward increasing cash flows so that the property can meet its debt service.

The Younan CEO calls the new debt group a natural extension of the company’s core business. The firm has significant experience with distressed assets in both acquisition and turn-around situations, having built the value of its portfolio in value-add plays where it has identified opportunities to improve efficiencies, reduce costs and increase an asset’s value.

Younan notes that since January of this year, the market for commercial mortgage bonds has frozen, as “Spreads on top-rated paper have swelled to levels customarily seen in the high-yield -debt market.” Many investment banks are looking to sell a huge inventory of commercial mortgages that were originated before the credit crunch took hold and now are under significant pressure to perform, he adds.

Younan, who debuted this week as a blogger for GlobeSt.com, observes that commercial real estate “has entered into a period where there will be fewer opportunities to acquire premium assets directly on acceptable terms,” as his firm has done throughout its accumulation of nearly 12 million sf of class A office properties. The firm owns buildings valued at more than $1.6 billion in key markets in Texas, Illinois and Arizona.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.